Gobal supplier: An employee at a food factory in Suqian, China. Business leaders say finding alternatives to goods from China will be challenging and expensive. — AFP
SHANGHAI: The United States’ latest move to raise tariffs on certain Chinese products threatens the stability of global supply chains and will ultimately pass the burden onto its consumers, according to market watchers and corporate executives.
The Office of the US Trade Representative (USTR) announced last Friday that it had finalised tariff hikes on selected Chinese products following a four-year review aimed at “strengthening protections for strategic industries”, despite opposition from multiple domestic sectors.
Business leaders and government officials said this will encounter industry opposition in the United States, as finding substitutes for certain Chinese products in the short term will be challenging.
Even if alternatives are found, they will come at a higher cost.
The US action not only severely disrupts international trade but also fails to address the United States’ own trade deficit and industrial competitiveness issues.
The tariffs have raised the prices of imported goods in the United States, and the costs will be ultimately borne by US businesses and consumers, said a spokesperson from China’s Commerce Ministry.
The final revisions announced by the USTR under the Section 301 investigation into Chinese products not only maintained the tariffs on imports from China, including electric vehicles, lithium batteries, photovoltaic cells, steel and aluminium, semiconductors and port cranes, but also further increased the tariff rates on medical gloves, needles and syringes.
“We are also disappointed that the USTR did not meaningfully broaden its tariff exclusion process,” said Craig Allen, president of the US-China Business Council, headquartered in Washington.
Allen said the tariffs make it harder for US companies to compete at home and abroad, cost American jobs, increase consumer prices and invite Chinese retaliation.
A spokesperson from the Beijing-headquartered China Council for the Promotion of International Trade, said the unilateral measures by the United States will severely undermine the confidence in long-term stable cooperation with relevant industries in China, and negatively impact global industrial and supply chain cooperation.Sharing similar views, Xu Deshun, a researcher at the Chinese Academy of International Trade and Economic Cooperation in Beijing, said that additional tariffs are protectionist activities, which is meant to hinder the development of China’s emerging industries and products toward the mid-and high-end of the global value chains.
Stephan Buurma, a board member of Messe Frankfurt GmbH, Germany’s largest trade fair and event organiser by sales revenue, underscored that as the growth of the global exhibition industry heavily relies on free trade and multilateralism, stable Sino-US and Sino-Europe economic and trade ties would benefit businesses on all sides.
“Despite external challenges, China remains a crucial market for global brands. Its vast consumer base, strategic importance in global supply chains and ongoing commitment to reform and innovation create significant opportunities,” said Willie Tan, chief executive officer of Skechers China, South Korea and South-East Asia.
With over 3,500 stores in China, the US footwear brand plans to continue market expansion in the coming years.
To cope with impacts caused by geopolitical tensions and the rise of protectionism, Ulrik Knudsen, deputy secretary-general of the Organisation for Economic Co-operation and Development, called on countries to ensure a fair global playing field for trade by maintaining open markets and a well-functioning, rules-based international trading system.
The United States remains China’s third-largest trading partner, with bilateral trade value reaching 3.15 trillion yuan or about US$444bil in the first eight months of this year, up 4.4% year-on-year, accounting for 11% of China’s total foreign trade value, according to statistics from the General Administration of Customs. — China Daily/ANN
